| Many Americans today don't have a savings | | | | your emergency fund. |
| account or emergency fund. I heard on the news | | | | Make sure you do some comparison shopping |
| on recently that the Commerce Department | | | | before opening an account for your emergency |
| reported that Americans spend all the money | | | | fund to ensure that they are no minimum or |
| they have and personal savings rates reached the | | | | other fees for accessing your account. A good |
| lowest level since the Great Depression. | | | | source to use is |
| Your emergency fund is your safety net, in case | | | | You can start off by contributing small amounts |
| you get sick or lose your job you can use your | | | | to your emergency fund until you are able to |
| emergency savings to hold you for a few months | | | | contribute more. Start off with a contribution of |
| until you can find a new job. | | | | at least $20 a month to your emergency fund. |
| Your emergency account should be separate | | | | Once you are able to contribute more to the fund |
| from your checking or savings accounts and | | | | do so. Make several short-term goals for your |
| should only be used for emergencies such as an | | | | emergency fund. Once you have saved enough |
| unexpected expense, unemployment, medical bills, | | | | money to pay one bill pat yourself on the back. |
| etc. | | | | Then keep saving until you have enough to pay |
| An emergency fund should be enough savings to | | | | three bills and so on until you have enough saved |
| pay your bills for at least 3 to 6 months. Money | | | | to pay your bills and expenses for 3 to 6 months. |
| for an emergency fund should be readily | | | | Once you have reached your emergency fund |
| accessible and stored in a checking or savings | | | | goal it is time to start developing some long-term |
| account, preferably a high interest savings | | | | goals such as an additional savings account and to |
| account such as Emigrant Direct or ING or a | | | | start planning for retirement. A great site to learn |
| money market account where you can make | | | | about retirement planning is and look under the |
| money while saving money. | | | | Personal Finance section. |
| To determine how much money is needed to pay | | | | Having an emergency fund will ensure that you |
| 3 to 6 months worth of your bills do an inventory | | | | are on the road to becoming financially secure and |
| and write down all your bills and expenses and the | | | | will prevent you from going into debt when an |
| monthly amount spent for each. Calculate the | | | | unexpected tragedy happens or unexpected |
| total. Use this amount and multiple by 3 or 6 to | | | | expenses arises. An emergency fund is the first |
| determine the total amount you need to save in | | | | step to getting out of and staying out of debt. |